Growing from $6 Million to $33 Million: Insights from Ed McGrath

How did Ed McGrath lead BancFirst Insurance Services from $6 million to an astounding $33 million in revenue? Discover the secrets behind this monumental growth as Ed, the President and CEO, sits down with us to discuss the pivotal strategies and leadership decisions that made this transformation possible.  

00:01 - Brent Kelly (Host)

Welcome to the Agent Leader Podcast. This is the podcast for agency leaders to learn, to grow, to develop and ultimately become their best version possible. My name is Brent Kelly. I am your host, excited to be with you and excited to share a very special guest. I have Ed McGrath today, who is the President and CEO of BancFirst Insurance Services. They are located in Oklahoma, although they also have offices in Texas and they continue to expand. BancFirst is a top 100 insurance agency and Ed's got a wealth of knowledge and experience and, as I tell all my guests, I may go all over the map in our conversations, but I can tell you this in my relationship with BancFirst, of course, getting to know  Ed, you're going to get a wealth of ideas and thoughts and my guess is Ed you might even challenge him a little bit today. I don't know, we'll see what happens. But first and foremost,  Ed, welcome to the Agent Leader Podcast.

00:59 - Ed McGrath (Guest)

Thanks, Brent. Glad to be here.

01:02 - Brent Kelly (Host)

So I'm going to start off and just keep this very high level. If you could share with the audience, the agent leaders out there,  Ed, just a little bit about BancFirst overview and then certainly your particular role and involvement with the agency as well.

01:18 - Ed McGrath (Guest)

Okay. BancFirst a publicly traded bank in Oklahoma and now in Texas. They got into the insurance property and casualty insurance agency business. Their first acquisition was in October of 2004 and purchased my agency in two and a half years later, in April 2007. So the leadership of the bank was looking to expand their total offering in financial services Made sense to him. We've had one acquisition since. It was a small million dollar book. It was more of a relationship situation, so the total revenues on all acquired that BancFirst for was $6 million.

02:04 - Brent Kelly (Host)

So since 2004, lots of things have changed. And some of the things that have changed is we've expanded into different cities.

02:16 - Ed McGrath (Guest)

We have four offices in the state of Oklahoma and one in the Dallas-Fort Worth Metroplex area. So we have grown organically from that $6 million of acquired revenue to this year we'll finish about $33 million plus. So the leadership of BancFirst from the very beginning that we could not run an insurance agency like we run a bank. So they encouraged I think that's a nice word, encouraged me and our agency leadership team to operate as an independent agency and not as a bank-owned agency. So the success that we have had as a bank-owned agency is, I think, a direct relation and benefit of the leadership of BancFirst saying you guys are autonomous, you do what you do, we'll do what we do and we won't try to micromanage you. Some of the bank owned agencies that I have seen in the country and I've gone through the Marsh Berry and the bank owned agencies and participated in that and the stories I've heard, you know I just said I'd lay the keys on the desk and say good luck with what I've seen.

03:43

So we're a little different, but we get to enjoy the benefits of a large publicly traded bank and all the resources and get to live every day as an independent agent and serve our customers as such. Well, a little different, but I'm right. Look at the numbers again agent and serve our customers as such.

04:05 - Brent Kelly (Host)

Yeah, well, a little different, but I'm getting. I'm right. Look at the numbers again from $6 million to $33 million in 20 years. Yeah, that's impressive and there's a lot to that. Right, and I want to get right into this. We were talking before we officially recorded. So one of the things is, obviously we've got a relationship with BancFirst of the Sitkins Network. And let me ask this first,  Ed, because I don't know the exact number off the top of my head how many million dollar producers do you have in your organization, right now?

04:37 - Ed McGrath (Guest)

Million-Plus dollar producers. Yeah, we have multimillion dollar producers, so we have 16. Our million plus dollar producers, so we have 33 total agents, eight of them. Eight of them are new and they're on subsidy right now. So you know, we have really been investing in new agents, believing that and, quite frankly, one of the reasons, you know when we first started talking, is when you have that many agents with that large of books, they become satisfi Ed, yeah, yeah fine, yeah, yeah, with the great agents that we have that represent us, also need to add new agents so that we can continue to replicate and grow the way that we have.

05:37 - Brent Kelly (Host)

Yeah Well, and kind of mentioned this, I'll go right there. So we first started talking, you know, learning about the history of BancFirst insurance and the growth, and one of the questions I ask in one of our initial meetings is why in the heck do you need us or want to work with us? And again, not that we don't feel that we can add value to agencies. That's our role and our goal of what we do. But with the growth that you have all had and experienc Ed, it wasn't like there was major things broken right, there was some really good things happening. So if you could address that, Ed, why the partnership? What were you looking for?

06:14 - Ed McGrath (Guest)

a long-term so I was first exposed to Roger Sitkins back early on. So I've been an agent since ‘86. And through young agents in Oklahoma, Roger actually came in and talked to us and I utilized some of the things that I had learned from his presentation. To answer the question why? Now? It's because of succession, leadership succession. I'm stepping down as president and CEO in January 1 and bringing on a new president, very sharp, young man, very capable, but kind of the things I say and do most people don't get away with. Kind of the things I say and do most people don't get away with. And you've experienced some of that yourself with me. But you know I also say you can't club off me. The way I do things don't necessarily work for anybody else. You know you can't bounce off trees, skip on water and land on the green every time and think that's normal, but it worked for me.

07:26

So what I wanted to do was put a more disciplined, accountable process in place to enable us to replicate and grow our business the way we have. So I believe what got us here wasn't going to get us to $50 million, especially with me stepping down here at the end of the year.

07:48 - Brent Kelly (Host)

Yeah, it's interesting. Again, I don't know if I've said this directly, but you know, kudos to you for that, Ed, just from a personal level of you know it's interesting because you probably are not going to say this, but I'll say it. Right, a lot of leaders don't think that way outside of their exit, right it's. Hey, I did my thing, I worked hard, I achieved some stuff and now I'm going to go do whatever I want to go do, which is great, versus I want to leave this place in a really good area for long-term growth, even after I'm not there. And again, that speaks volumes and we see this often from you know, just, great agency leaders. They think well beyond into the future and I think that that's just again a kudos to you for that.

08:29

I want to start with success and again, whether it's a specific situation or an area that you guys have had great success. I know it's more than one or two. That could probably go on for a while here, but you know from the agent leader audience here, people listening and going wow, this is an agency, went from $6 million to $33, and they're going to be continuing to grow. What are some things they've done or doing that have worked so well and what can I learn from that? So I guess it's the way I'll approach the question that you add is just maybe highlight success or two, or however many you want, of things that BancFirst, your organization has done really, really well to get that momentum you've achieved?

09:15 - Ed McGrath (Guest)

Well the single biggest thing is our ability to attract really high caliber, quality people and I would rate that as one of my greatest accomplishments because the agents, the staff, the leadership team we have, I would tell you they could go anywhere. And it's funny, we don't have contracts with anybody. I have no employment contracts. I don't believe in them, I never have and I told the bank right off I don't want them. You know, we try to create the environment that if you can't succeed here, you can't succeed anywhere and I want everyone to be here. I want them to want to be here. I want them to want to be here and if either one of us change our mind, then you know we'll have that conversation. But we don't lose agents and we don't have producer contracts.

10:13

So it's kind of crazy in college where they hooked us up to electricity and they would shock you and with one of the experiments you had a button that you could push to tell them to stop and with the other one you didn't. So what they found is the people that didn't have the buttons to tell them to stop would say, oh, it's too painful, at a lower level than the people that had the buttons to stop the pain at any time. I probably made 10 bucks on this, so I might be sharing something here, but I think it's really the control thing. So the fact that they know they can go, the customer will make the decision who they want to do business with. So we don't have contracts and you know that's a little different and somebody might look at that and say, oh, you know you're vulnerable, but I feel that you know you create the culture, the environment where people want to be there and they're all. They all have their Me, Inc.’s and We, Inc.’s and we're all being successful together.

11:27 - Brent Kelly (Host)

Yeah, well, there's a track record there to support your claim, to say the least, although I know right now there are people listing their jaws are probably on the floor. You, what you know, you don't have any contracts Like no, which you know, and this word is probably overused Ed, but I think what you said there Ed, and I wrote down, I mean it's, it really is the word empowerment, like it really is giving power to others, and I think that's interesting too. I hadn't thought about it in that way. About the control and it's interesting, like, if I don't have any control right, like you start to get that's when you have all these feelings and things and you get squeamish versus I've got some control here and I could control, I don't want to be here anymore. I wanted to, yeah, but because I have some of that control, I realize I'm much better served. So it's just very interesting. I have to go look at that experiment you talked about.

12:22 - Ed McGrath (Guest)

It's 45 years old.

12:25 - Brent Kelly (Host)

It's crazy. That's crazy so well from a cultural perspective again, not shocking what you built Anything else again it could be internal, external that you found that has really worked well for your agency.

12:38 - Ed McGrath (Guest)

When I look at successes, I have to look at the problems that we're facing. Sure, that's how we are we're going to measure a success. It depends on the, on the obstacle in front of us. Something we just did recently, in fact, we finished it two weeks ago, in fact, we finished it two weeks ago. We struggle, like everybody else, for talent, you know. I mean this is an ongoing battle for a long time. I think COVID, you know, escalated exponentially for us. So something I had happened a couple of months ago I had a producer come to me, one of our million plus dollar producers, and most of our businesses won on broker selection as opposed to quoting. But the producer came to me and he said I would not accept a BOR if anyone handed it to me, because we don't have the service staff to be able to serve the customer, and you can imagine how I might have responded.

13:44

It sounded a lot like oh hell no, and so what I did is I contacted the Hartford School of Insurance. I contracted with them. They came in and did a two week school for us, for the commercial lines covered specialist school, and then a lady who had recently retired this last year brought her back and said OK, you've been retired for six plus months, it's enough. Now I need you to come back to work. And and she is teaching a class of 18 students on how to become account managers. So you know, actually it's 15. So we had three new producers I put through the Hartford School and 15 new prospective account managers, and then we will deploy them into our different offices across the state and Texas. So that's the problem and this is our success. We believe that doing this internally, instead of paying headhunters or paying somebody $20,000 more than they're making where they are now and promising them to work remote, that seems to be the hook. We're going to grow our own.

15:07 - Brent Kelly (Host)

Yeah, that's a great story and I just I'm making notes here, I mean of that. I mean obviously, yes, there's a challenge for talent and I do remember, yeah, very distinctly, you mentioned the fact that basically, we don't have capacity to write more business, right, right, which, to say the least, is a problem. I think you know what you said there and again. Part of this I keep thinking of learnings and takeaways is there are a lot of people and this happened to me too. I'm certainly this has happened to me, but I try not to be this way is that there's a problem or there's an issue and you go. I guess it's just not possible.

15:43

And the difference is you've heard us talk about this, probably in some of our sessions it's not possible unless what? It's not possible unless what? Well, unless we do this and I think for a lot of agent leaders and people in general again I've been here before is that we focus so much on the problem or the challenge that we never discuss the solution and we spend the majority of our time complaining about the problem versus the majority of the time brainstorming and filtering. What is the action we're actually going to take for the solution?  And to me that's an abundance versus scarcity, and I don't have a question here necessarily other than and maybe there's other areas, you've seen that, but hey, do you agree that and see that a lot of people are scarcity mindset versus the abundance mindset? And how do you see that apply? Maybe just insurance agencies in general? That's vague question, but I'd love to get your feedback there.

16:44 - Ed McGrath (Guest)

Well, I believe we're all dealing with the same issue. Those are more focused on growth. So you know saying all agencies. When you look at the independent agent landscape, anywhere from the four-man office to the international broker, we all struggle with a lot of the same issues. But people have resources today that didn't exist 40 years ago. So when I started in the agency business, you know I had an IBM selector typewriter, I had a copy machine and I had a desk phone. That was my technology. And I had a phone book.

17:28 - Ed McGrath (Guest)

You know that was my total technology. What's available to people today to overcome these obstacles, the amount of information and the solutions that we can provide, the distribution outlets that are available to agencies today, is just there's no excuse if, if you're willing to do the work. You know I have a saying that everything works if you will. You know it's that simple. Uh, you know, every diet I've been on will work if I'll work. That’s what it takes. So it's just a willingness to put yourself out there, take risk and you know embrace it, just lean into it.

18:23 - Brent Kelly (Host)

Yeah, yeah, it's great. I mean, it's just a simple but important concept. It only works if you do. And it is true and I think part of that too, Ed, is you've got to be a bit creative, and you mentioned taking risks. But I've got to be a bit creative, and you mentioned taking risks, but I got to be a bit creative. How could I do this a bit differently? I mean, even going back to what you said as far as the trajectory of the agency, what got us here is probably not going to get us there Right. So I got to be a bit creative. What's some new and innovative things I can do?

18:56

I didn't prepare you this question. I apologize, but I want to ask. I told you I get curious about stuff because I I was thinking back. Earlier on, we talked about the amount of top level production, talent, multi-million dollar producers that you have, and I, quite frankly, I don't have the opportunity to have that many agency leaders with that many multi-million dollar producers, and so it hit me on this is that you know, because you've worked so closely with so many of them, what are some of the characteristics that you've seen in the top, top level producers? What do they have, what do they possess, what do they do? How do they think? I think that'd be a fascinating question to get you to share, because you're so close to it fascinating question to get you to share because you're so close to it.

19:39 - Ed McGrath (Guest)

Well, you did not prepare me for this question. I didn't, so you might be a little surprised on this answer All right. Our number one, our highest producing agent, actually went through the Sitkins program more than 20 years ago and he was with a different agency at the time.

19:56 - Ed McGrath (Guest)

I hired him in 2008 and brought him on, but it's those disciplines. There's no magic to this. It's really the processes and the disciplines and that is the difference. And it sounds so simple just to say that, but it's hard work and a lot of people don't like hard work. You know, being disciplined, being consistent, working, working the plan, the process, working the plan, the process. It's just that and you know there's no magic. There are guys that you know specialize in different business segments and they're very good at that, and there are guys that they are network builders and they just thrive on reciprocity. You know kind of that, Zig Ziglar. You know they're doing something for someone else all the time. They're always networking, they're always building their pipelines, they're working their centers of influence.

21:10

But really it's just the processes, the disciplines and what I have created. Loosely, I believed after you sent me the book Best Version Possible, which I guess you sent it to everybody, if you sent one to me. But when I received the book, I read it and that's what caused me to pick up the phone, because I recognized what I had been doing again wasn’t going to continue to grow our agency, because our trajectory line, you know, just looks like that and and I think it's a failure of leadership if we don't continue it. You know I didn't do my job, so you know he's bought into this and uh, you know I, I expect us to be there. I expect us to be $50 million within five years

22:21 - Brent Kelly (Host)

I know, yeah, I'm going on hunches here and hunches aren't going to solve any of the world's problems, but knowing and I think you used the word several times there well, you've been disciplined. Uh, I also want to throw in the word dedication, right, like part of that is no, we're going to make this happen and there's that focus on that. And you've been on some of the leadership sessions we've been doing the last few weeks and I've been talking about this. I think what you said, Ed.

22:51

It illustrates this point really well that anybody can get excited about something for a short period of time. I mean, I can think of many things, like you mentioned the workout. Like this time, I really mean it, right, but it is whether you want to. You were the dedication, consistency, whatever is, am I willing to put the work in, even when it sucks? Yeah, and it's like well, I don't want to hear that. It's like, well, I would love to tell you there's some magic bullet or whatever pill, whatever term you want to use, but it's not. And you know, and having the pleasure of talking to some top level producers myself, I mean it's always like you ask a question of what's made you successful, and you always want to expect this like really cool answer, although now I don't.

23:35

The answer is generally I just do the basic stuff a lot right and I do it really well and I do it really well, right, and I continue to get better and I just keep working it, and then I work it, and then I work it, and then I work it, and I uh remember talking to producer. He forgot how he worried he goes. You know what he goes. There are some weeks and some things that I do that I really don't like it. He goes. You know what, though?

24:00 - Ed McGrath (Guest)

I really love my lifestyle, yeah and I thought it's been a tremendous ride, tremendous career and, uh, you know it's, uh, it's where those B- students can really shine.

Yeah Well, I suppose that's one way to look at it, but part of it is being B - wasn't about the work, ethic right or dedication. Necessarily I wasn't interested.

It was a work-life balance.

24:29 - Brent Kelly (Host)

There you go, there you go. Well, I want to hit one more thing on here, Ed and I know again, it's my own fault I didn't count of the conversation. I gave you some questions, then I go all over the map on things. But you've been doing this for a while and I want to ask a question. It's a question I ask every agency leader If you were having a conversation with a younger version of  Ed, what would you say? So newly started in the business, Ed is walking down the street today and you run into him and besides the fact he'd probably say, wow, what a good looking guy. Uh, now I think you're not a good looking guy now, Ed. But you look back, oh, look at this, and he looks at you and he says, hey, listen, wise Ed, if you could give me one piece of advice, what would it be?

25:19 - Ed McGrath (Guest)

Other than buying certain stocks 40 years ago. Other than that. The biggest thing that I would say is trust yourself and take more risks, because I look back and can see certain stages of my life and I trusted myself more and taken more risk at the. At those times I could have done. You know, I could have done exponentially more than than we've accomplished so far, and that's that's really it, you know don't play it safe.

26:04

Not that I feel like I played it safe, but you know, there are times when I definitely if I would have had more confidence in myself you got to, it's a mindset, the battles between the ears all the time but had, I had the mindset, and taking those risks and really believed in myself yeah it would have been fun to see you know what we could have accomplished.

26:24 - Brent Kelly (Host)

You know, from an emotional level, it is interesting that maybe we don't always use a term, but fear of different things holds people back in a lot of different areas and, whether we like to admit or not, we all experience different levels of it at different times in different places. So I think that's a really interesting answer. There isn't a wrong answer. So I'm going to ask you another question here, Ed, because why not? It's my podcast and I have you on here, so I don't want to keep you too long. But within that, where do you and again, I just come back on the producer relationship and maybe your own experience when have you seen fear, doubt, uncertainty hold people back? In what ways? Because it's everywhere. Yeah, yeah, something as simple as asking for referrals.

27:16 - Ed McGrath (Guest)

I mean it's everywhere, yeah, something as simple as asking for referrals. I mean it's so simple. Here You've they. They're singing your praise and you're saying thank you, and you know that's my job and not having the, the confidence in yourself to believe you're worth asking for a referral.

27:37

I mean that's just one area, but it's an important area because a lot of our business is at least 35% of our business is referral-based in our agency, but that's uncomfortable. You just solved a problem for them. You've created this risk management solution and you're not confident still at this point to be able to ask for a referral.

28:10 - Brent Kelly (Host)

So that's one area. Yeah, it's a big area, you're right, and there's more than that. But just basic numbers. Again, it's all. Every agency is different, but we've seen it Gosh. Why is it that 90 percent of clients will continue to pay you money, renew with you, yet less than 10 percent will actually refer? Why is there such a gap there? And you've heard us say this in our programs your best clients, they really do want to help you.

28:36 - Ed McGrath (Guest)

You've heard us say this in our program your best clients, they really do want to help you. Yeah, I believe that. But I think that's a confidence. You know, that is one area where confidence is a key factor there.

28:49 - Brent Kelly (Host)

Yeah, what's outside of pending future basking in the sun and glory of retirement someday?  Ed, what are you most looking forward to the next even year, because I know you're going to be doing some consulting work with BancFirst well. What are you most looking forward to?

29:06 - Ed McGrath (Guest)

The thing I get the most joy out of right now is building up younger producers and helping them be successful. I mean this industry. We're losing so much talent here within a five-year period. You know, I'm actually on the on the young end of it and I'm receiving my Medicare card my next birthday, so you know, but I consider I'm still at the young end of it. There's a lot of guys that are going to be and gals that are going to be out of this industry and creating those same opportunities for young people to see what a great life this has been you know for me and for so many others, and just helping them equipping them to be able to do that, yeah, great, I love it.

29:57 - Brent Kelly (Host)

And we need more ads and people doing that. I know there are a lot of people that are giving back to the industry. But, like I was talking to someone earlier today and I said I don't know where I heard this, but I said you know one of the things if we can help young people that might be in a really cool or they consider a great job, understand that there might be a really good job, that's an amazing, great career, exactly right, that'll change their life. So and as again we kind of wrap up here a little bit, I'll leave this open. Any other thoughts, ideas, comments. You've got the platform here, with agent leaders that are listening in. Just some general thoughts as we kind of wrap up here today?

30:40 - Ed McGrath (Guest)

I think the best agencies right now, including ourselves, are enjoying tremendous growth and profitability, but we can't take that for granted. You know, in 38 years I've seen markets change. So the biggest challenge is having the right who's in our shops and equipping them. So, no matter what those obstacles are, whatever change is going to hit us be it inflation, you know, be it war, whatever it's going to be we're going to have the right people in place and the right resources to handle what's coming.

31:27 - Brent Kelly (Host)

We don't know what's coming.

31:29 - Ed McGrath (Guest)

But again, no fear and just lean into it. Know that we have the right booze and it's always that the book who, not how. So you know we're going, that's what we're doing. We're trying to put together the best work family for BancFirst insurance services that we'll be able to handle as well as anyone what's coming and to be able to deal with that, because it's good, but it's not going to stay good forever.

32:08 - Brent Kelly (Host)

Well, we've probably overused this quote and maybe you've heard it on different stuff, but I do love it. The Warren Buffett quote that when the tide rolls out, we'll know who's been swimming naked yeah, that's right and it.

32:17

It's true, and I think you know I had just a, I guess, my summary in my head of what you said and I, you know I always use the phrase control the controllables. But it's true, there's certain things that we do have, uh, some control and power over, and many things that we don't. And doesn't mean the things that we don't don't impact us. It means that it's not our best use of time right and energy in many cases of what if they do this and what if this happens. And what happens here is let's empower our who's, get good who's and give them processes and plans and tangible things.

32:51

We can, we can do that, give us some power and control back regardless of what happens, because I can't control what's outside, but I can control what's here, and I think that's a very, very powerful thing. So, thanks so much for being a guest on the podcast. It's been a pleasure and again certainly appreciate the partnership with BancFirst and getting to know you, and one thing I know about you and the agency is you will get to your $50 million because there's dedication to it. So I know you've had a ton of value. So, Ed, thanks so much for being on the podcast today.

33:27 - Ed McGrath (Guest)

Thank you. I enjoyed it.